The Law of Supply

The conservative advocacy group Freedom Watch -- which used to focus on national security issues but apparently now has no particular "cause" -- has announced that it will be making robocalls into a few dozen Congressional districts, including the Kansas 2nd (Nancy Boyda). The group said the ads will focus on gas prices and Rep. Boyda's vote against offshore drilling.

This obsession with affecting gas prices by increasing supply infuriates me.

I don't know if y'all remember Econ 101, but there are two sides to that chart that looks like an X. You've got the supply part down. In theory, increasing supply while demand remains constant will decrease the price (though economists believe IF such a theory were to work, it would take nearly a decade to see any noticeable affect).

The problem is, most economists believe any increase in supply will result in a corresponding increase in demand, thereby negating any downward pressure on price and perhaps even causing it to rise some. Not to mention increasing carbon output and ignoring our reliance on carbon-based fuels of which we have a finite supply.

I'm not going to go so far as to imply that its a poorly disguised attempt to increase oil consumption and thus increase the profits of oil companies, but it sort of makes you wonder.

That other line? That's called demand. On this side, the theory is if demand decreases while supply remains constant, prices will decrease.

The answer is conservation. Jimmy Carter hit the nail on the head in his American Malaise speech, though he was chastised for it, the only way to truly ween ourselves off of oil is to enact policies that affect demand, not supply.

We need to be focusing on designing and developing American cars that might actually be feasible to sell 10 years from now. The SUV, the 5,000 lbs car and the 6.5 liter V8 are dying, and it's time for Detroit to realize that.

We need to enact policies that make public transportation in the midwest a real possibility.

We need to start dedicating federal research dollars to developing wind, solar, nuclear, geothermal and any other non-carbon-based form of energy production. (Thanks for twice voting against those taxbreaks to encourage alternative fuel research, Sen. Roberts)

We need to start investing in ethanol that is not made from things that we might want to eat.

We need to stop promoting shortsighted policies that do nothing more than increase the profits of oil companies.

The truth is, no matter what we do, gas prices aren't going to be $2.00 a gallon anymore. The only real solution is taking steps to ween ourselves off of ALL oil, not just foreign oil.

Kansas GOP misleads yet again

Now that the Kansas GOP has started their own blog, it's become a lot easier for them to make stuff up (or at least so that people can read their lies).

These days, they're misinforming the public about Barack Obama's stance on gas prices -- specifically the gas tax holiday which economists EVERYWHERE argue is a horrible idea. Apparently the KS GOP isn't casting their lot with economists either.

Think about it, if the supply of oil remains constant, and the price rapidly decreases (nearly 19 cents a gallon if the federal gas tax is temporarily repealed) what do you think will happen?

Naturally, demand for gas, which has been going down lately, will increase. For those of you who haven't taken any economics courses, when supply remains constant and demand increases, price increases as well.

Economists believe that this spike in demand would at the very least negate the 19 cents per gallon saved by the repeal of the tax and maybe even surpass it. Meaning that instead of the 19 cents per gallon (approxmately $8 billion per year) going to build roads and bridges and highways, it would go to the pockets of big oil, who don't need it.

If you don't believe me, check out what Dartmouth and Oxford educated economist Robert Reich has to say in his May 4 blog. Reich served in the Clinton administration and is a personal friend of Bill and Hillary Clinton (who is also advoating for a gas tax holiday), so it's not as if he has an axe to grind.

If the KS GOP truly believed that Obama didn't have a chance to win Kansas, do you think they would waste their time spreading misinformation about him in mid-May? Me neither.

Record Prices a the Pump = Record Profits for Big Oil

Big Oil has been announcing staggering first-quarter oil profits this week:

• Exxon Mobil: $10.9 billion
• Shell: $9.1 billion
• BP: $7.62 billion
• ConocoPhillips: $4.12 billion
• Chevron: announces tomorrow

And while these record profits help to line the pockets of Big Oil CEO's, those same CEO's line the pockets of rotten politicians like Pat Roberts and Todd Tiahrt.

And what are our pockets lined with? Well, mine feel about $50.00 lighter every time I fill up my gas tank. How about yours?

Wait...wait...what's this? I just found some complete bullshit in my pocket. I wonder who put that there?

“Any tax increase that Congress imposes on the oil companies would only be paid for by consumers through boosted prices at the gas pump.”

Thanks, Tiahrt. But a study by the Consumer Federation of America begs to differ:

The oil industry’s response to increased demand and higher prices suggests market manipulation. Rather than investing in additional refining and storage capacity to avoid shortfalls, the industry has systematically underinvested and there is thus a shortfall of over 3 million barrels per day in refining capacity. This is not the behavior of ordinary market participants in absence of collusion.

Thanks to Pat Roberts and Todd Tiahrt - who have been taking money from Big Oil for years and repaying them by voting for billions in tax breaks and incentives - we are stuck with empty pockets and no plans for a summer vacation.